FCA flexes sustainability deadline for some
The FCA has introduced temporary flexibility measures for firms dealing with the Sustainability Disclosure Requirements (SDR), specifically relating to naming and marketing rules for sustainability products.
In Scope Activities
These measures apply to UK-authorised investment funds that use the terms ‘sustainable’, ‘sustainability’, or ‘impact’ (or variations of these) in their names and are seeking to either:
- Use a sustainability label in line with SDR.
- Change the fund’s name to comply with the new naming and marketing rules.
Temporary Flexibility
The FCA is offering temporary flexibility to firms facing challenges in meeting these rules, extending the compliance deadline to 5pm on 2 April 2025, in exceptional circumstances. To qualify, firms must have submitted a completed application for approval of amended disclosures by 5pm on 1 October 2024.
However, the FCA emphasizes that firms should comply with the rules as soon as they are able, rather than waiting for the extended deadline.
Who Can Use the Temporary Flexibility?
This flexibility is limited to firms:
- Currently using the terms ‘sustainable’, ‘sustainability’, or ‘impact’ in their fund names.
- Intending to either adopt a sustainability label or change the fund name to align with the SDR rules.
Funds using other sustainability-related terms not specified above are not eligible for this temporary flexibility.
How to Obtain the Flexibility?
Firms must:
- Submit a completed application for approval of the amended disclosures in line with SDR by 1 October 2024.
- Provide evidence that they are unable to meet the naming and marketing rules by the initial 2 December 2024 deadline.
This temporary measure is intended to provide firms more time to adjust to the granular demands of the SDR regime, including detailed sustainability disclosures and investment labels.
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